• To stabilise fuel prices, exchange rate
By Marvellous Nyang
July 29, 2024
In a significant move to stabilise fuel prices and the dollar-naira exchange rate, President Bola Tinubu has directed the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to Dangote Refinery and other upcoming refineries in Nigeria using the local currency, the naira.
Bayo Onanuga, Special Adviser to the President on Communication and Strategy, announced the directive, stating, “To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council today adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in naira.”
The Dangote Refinery currently requires 15 cargoes of crude, costing $13.5 billion yearly. NNPCL has committed to supplying four cargoes, but the FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pilot.
“The exchange rate will be fixed for the duration of this transaction. Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited.
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“The game-changing intervention will eliminate the need for international letters of credit, further saving the country of dollar payments,” Onanuga added.
This directive comes amid ongoing disputes between the 650,000 barrel-per-day Dangote Refinery and NNPCL, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and other regulators in Nigeria’s oil and gas sector.
